After protests - Federal government partially withdraws agricultural subsidies
The traffic light coalition wants to partially reverse planned cuts to subsidies for farmers. Accordingly, there will be no abolition of the motor vehicle tax exemption for agriculture, as the federal government announced on Thursday. The abolition of tax concessions for agricultural diesel will not be carried out in one step.
Federal Chancellor Olaf Scholz (SPD), Vice-Chancellor Robert Habeck (Greens) and Federal Finance Minister Christian Lindner (FDP) had agreed on this, according to the federal government spokesperson.
The abolition of the preferential treatment in vehicle tax for forestry and agriculture will be waived in order to avoid the "sometimes considerable bureaucratic burden" for the companies concerned, it said.
Agricultural diesel will gradually become more expensive
The tax concessions for agricultural diesel are to be gradually reduced in order to give the affected companies more time to adjust. According to the federal government, the rate of relief will be reduced by 40 percent in 2024. In 2025 and 2026, there will be a further reduction of 30 percent in each year, meaning that there will no longer be a subsidy for quantities consumed in 2026. The reimbursement of the quantities consumed in 2023 in 2024 will remain unchanged.
In mid-December, Scholz, Habeck and Lindner agreed on a package of measures to plug the billions of euros in shortfalls in the federal budget following a ruling by the Federal Constitutional Court. This also included the abolition of the so-called agricultural diesel and the motor vehicle tax exemption for farmers.
Massive protests from farmers
The plans triggered massive protests from farmers and were also controversial within the coalition of the SPD, Greens and FDP. The German Farmers' Association has called for a week of action against the planned cuts starting on Monday. A major demonstration is planned for January 15 in Berlin. Farmers' President Joachim Rukwied had described the cutback plans as unreasonable and said that the traffic light should withdraw them completely.
Specifically, it is about the regulation that allows farms to receive a partial refund of the energy tax on diesel - with a refund of 21.48 cents per liter. Another issue is that agricultural and forestry vehicles are exempt from vehicle tax.
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- Despite the protests, the SPD, Greens, and FDP members in the Federal Government, including Olaf Scholz, Robert Habeck, and Christian Lindner, have decided to partially reverse their planned cuts to agricultural subsidies.
- The traffic light coalition has decided not to abolish the vehicle tax exemption for agriculture entirely, as previously planned, due to the concerns raised by the affected companies.
- The federal government motion, led by Olaf Scholz, Robert Habeck, and Christian Lindner, includes maintaining the motor vehicle tax exemption for forestry and agriculture to avoid the "sometimes considerable bureaucratic burden" for the companies.
- Christian Lindner, as the Federal Finance Minister, mentioned that the abolition of the agricultural diesel subsidy will not be instantaneous, but will be reduced gradually by 40% in 2024, and 30% each year in 2025 and 2026, and phased out completely in 2026.
- Farmers and farming organizations, such as the German Farmers' Association, led by Joachim Rukwied, are planning a week of action starting on Monday in Berlin, opposing the proposed cuts to agricultural subsidies and vehicle tax exemptions, calling them unreasonable and demanding a complete withdrawal of these plans.
Source: www.stern.de
